Florida agriculture's future hangs on new NAFTA

BALM — The future of Florida agriculture will be inextricably tied to Mexican agriculture and negotiations over the North American Free Trade Agreement.

“We all know or suspect how much Mexico has subsidized growers at our expense,” Jack Payne, the chief executive of the University of Florida’s Institute of Food and Agricultural Sciences, said at Wednesday’s FloridaAgExpo. “It’s become a central piece in negotiations for a new NAFTA treaty.”

Four leaders of trade groups representing a wide range of the state’s fruit and vegetable commodities wholly agreed with Payne. They spoke on a panel addressing "The Future of Florida Agriculture."

“Every year we’re seeing more and more volume coming out of central Mexico,” said Kenneth Parker, the executive director of the Florida Strawberry Growers Association in Dover, referring to strawberry imports to the U.S.

“Central Mexico is creating a situation where we may no longer be viable,” he added. “All that volume is made possible through a vast amount of subsidies the Mexican government has made available to its growers.

"We think it’s not fair. We hope the NAFTA negotiations will treat us fairly,” Parker said.

The one-day Expo held at UF’s Gulf Coast Research and Education Center in Balm, east of Apollo Beach in Hillsborough County, drew more than 700 participants in its 12th year.

Mike Stuart, president of the Florida Fruit and Vegetable Association, who has played a leading role in lobbying for the state’s agriculture industry in the NAFTA talks, said the fifth round of negotiations is scheduled for Nov. 15 in Mexico City. Negotiators had hoped to conclude a new agreement by the end of the year, but that deadline has already been pushed to the spring.

Florida agriculture has been successful in getting the Trump administration and U.S. trade negotiators to push for changes addressing the concerns of the state’s growers, Stuart said.

But, he added, Florida agriculture has an even bigger opponent than Mexico in getting its policies into the final trade treaty — the rest of the U.S. agriculture industry.

“We’ve got virtually every other agriculture group in the United States against (us),” Stuart said.

Reggie Brown agreed. He’s the chief executive of the Florida Tomato Exchange, representing that industry’s growers, and has played a leading role in trade talks with Mexico since the first NAFTA treaty was negotiated in the late 1980s.

“As time goes on, the storm clouds get heavier. There’s more and more opposition to (us),” Brown said. “It’s going to be a long, heavy lift.”

Florida represents only about 10 percent of total U.S. fruit and vegetable production, Stuart said. Moreover, almost all that production comes during the winter months, the same months during which most Mexican farmers operate.

Growers in other states harvest during the summer and fall, when there’s little competition from Mexico, Brown and Stuart said, so there’s little interest among the majority of U.S. agricultural interests in dealing with Florida’s issues.

One provision strongly opposed by non-Florida agriculture interests is a new policy that would make it easier to bring dumping complaints, Stuart said.

Florida growers, particularly tomato growers, have long accused their Mexican counterparts of dumping, or exporting products at prices below the cost of production. The predatory trade practice is illegal because it attempts to drive competitors out of business, creating a monopoly market for foreign producers.

But the current anti-dumping rules require proof that all U.S. producers of a given commodity are harmed by the dumping, Stuart said.

If growers in California, for instance, don’t feel they’re being harmed by Mexican exports because they don’t harvest during the winter, it makes it difficult for Florida to make a successful case, Brown and Stuart said.

The proposed change would allow for successful anti-dumping action if the damage is limited to a seasonal industry, as most of Florida's commodities are, they said.

Mexico strongly opposes the change and has threatened retaliation against all U.S. growers if Florida were to bring a successful seasonal dumping case, Stuart said.

U.S. Secretary of Commerce Wilbur Ross and Assistant U.S. Trade Representative John Melle, the chief NAFTA negotiator, say the Mexican threats have had the desired effect on non-Florida interests, Stuart said. “They’re both telling us they’re getting a lot of push back.”

But Brown cautioned that a change in the rules, if agreed to, would have a limited effect because bringing dumping cases costs $1 million to $2 million. The Florida tomato growers have been involved in dumping-case settlements with Mexico for 20 years.

“It’s not a magic bullet. It doesn’t close the border,” Brown said. “We’re still in a free and fair trade world, and that’s not going to change.”

Even eliminating NAFTA would not have a significant impact on Florida agriculture if both countries return to pre-treaty tariff levels, Stuart said. The current tariff of 4 cents per flat of strawberries would rise to just 10 cents under the pre-NAFTA rates.

The officials also discussed a reform to the federal guest worker program for agriculture, which allows U.S. farmers to bring in workers from Mexico and Central America to harvest crops. Florida growers, the biggest users of agricultural guest workers, have long sought reforms to the program to cut costs and red tape.

But two provisions in the current reform proposal, which passed a U.S. House of Representatives committee, added fatal flaws, Brown and Stuart said.

One provision would cap the number of agriculture guest workers at 400,000 people, they said. The current program has no cap.

The other provision would require undocumented immigrants working in agriculture currently, estimated at more than 1 million people, to return to their home countries and apply for one of the guest-worker slots.

The federal government is completely unprepared to process 400,000 guest workers, Brown said, and many U.S. agriculture sectors would lose workers permanently if they were forced to return to their home countries.

Many sectors, such as livestock, dairy and plant nurseries as well as meat packing and other processing plants, could not replace lost undocumented workers because they would be ineligible under guest-worker program rules, he added. Those sectors offer year-round employment while guest workers are intended primarily for seasonal harvest jobs.

“I’m not sure that’s a viable solution, and I don’t think anybody in U.S. agriculture thinks that’s a viable solution,” Brown said of the return-home provision. “Certainly, this cap is a problem that needs to be addressed.”

U.S. agriculture would strongly oppose the reform package if it retains those measures, combined with a mandatory e-verify provision on employers, Stuart said.

The e-verify system would require employers to confirm the citizenship of prospective hires through a federal government database. If a discrepancy arises between information on the employment application, such as a Social Security number, and the database, the company could not hire the person until the matter is cleared up.

“We will die on our sword if e-verify passes without something for agriculture,” Stuart said. “We will not have a workforce.”

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